MPs claim the reforms would address fears that poor teachers are having a “very significant” impact on children’s long-term career prospects. The report quotes international research which shows that the worst teachers could cost a class of 20 the equivalent of £250,000 in lost earnings over their career.

Eric Hanushek, an economist at Stanford University in America, has shown that an excellent teacher can cover a year and a half’s material in a single year, whereas a poor one will get only a third as far.

Last night, Nick Gibb, the schools minister, disclosed that the Government had already asked the School Teachers’ Review Body, which analyses national pay rates, to “make recommendations on introducing greater freedoms and flexibilities in teachers’ pay, including how to link it better to performance”.

Mr Gibb said the Department for Education welcomed the MPs’ report “into this important area”. The review body is expected to deliver its recommendations by September.

The committee’s report said: “No longer should the weakest teachers be able to hide behind a rigid and unfair pay structure.

“We believe that performance management systems should support and reward the strongest teachers, as well as make no excuses — or, worse, incentives to remain — for the weaker.

"Given the profound positive and negative impacts which teachers have on pupil performance, we are concerned that the pay system continues to reward low performers at the same levels as their more successful peers.”

MPs said any payment by results system should reward those teachers adding the greatest “value to pupil performance”.

But teaching unions are strongly opposed to any attempt to alter national pay and conditions.

Speaking on Tuesday, Kevin Courtney, deputy general secretary of the NUT, said it was impossible to “disentangle” the performance of one teacher from another.

“You will build a huge incentive to teach to the test and you will also build a level of distrust in the staffroom that will be inimical to education,” he said.

He told BBC Radio 4’s Today programme that any performance-related pay system would depend on the amount of progress teachers make with individual pupils.

“Now, that’s determined by what the teacher the year before says the achievement of their child was, so if that teacher over-claims, then they are reducing your potential pay,” he said. “Because of that, you are building in a mutual distrust to a system. Schools are teams, and you have to have that teamwork, but these proposals go in the wrong direction”.

There are currently more than 460,000 teachers in English state schools. Although an element of performance-related pay already exists, ministers are now looking at enhancing rewards for the best.

Currently, teachers outside London can earn up to £31,500. but see their pay rise to £34,200 if they pass a threshold into an upper pay scale to mark performance. Earlier this year, Sir Michael Wilshaw, the head of Ofsted, said too many teachers – more than 90 per cent – were allowed to pass the test. “The thing that irritates good teachers, people who work hard and go the extra mile, is seeing the people that don’t do that being rewarded,” he said.

In December, it was reported that just one in five teachers judged to be incompetent over an 18-month period had been sacked.

In further recommendations, the report says a “sabbatical scholarship” programme should allow outstanding teachers to take time out to work in a different school, undertake research or refresh their subject knowledge. It is also suggested sixth formers and university undergraduates be allowed to lead school lessons as part of a system of “teaching taster classes” to show them the benefit of a career in the profession.